EU approves German subsidies for ArcelorMittal green steel plans

The European Commission has approved 1.3 billion euros of German state aid to help multinational steelmaker ArcelorMittal make its operations in the country more climate-friendly. The company’s low-carbon project involving the northern city of Bremen and eastern Eisenhüttenstadt is meant to save more than 70 million tonnes of carbon emissions by 2041, according to a press release from the economy ministry (BMWK). “This is a strong boost for economic development and the ramp-up of the hydrogen economy in these regions,” minister Robert Habeck said. The new plants are scheduled to enter operation in 2026. “The use of hydrogen will steadily increase, with plans to eventually use more than 135,000 tonnes of renewable hydrogen per year. This will produce more than 3.8 million tonnes of green steel,” the press release reads.

The approved ArcelorMittal project, dubbed “DRIBE2,” consists of several sub-projects, the ministry explained. The construction of a direct reduction plant (DRI) in Bremen was selected as part of the "IPCEI Hydrogen" (Important Projects of Common European Interest - H2) programme. The DRI plant will supply three electric arc furnaces (EAF) with directly reduced iron, one in Bremen and two more in Eisenhüttenstadt. The carbon savings from DRIBE2 of up to 5.8 million tonnes of CO2 per year by the end of the project period correspond to more than 10 percent of the emissions of the entire steel industry in Germany, it added. Germany’s steel industry is responsible for one third of the country’s industrial emissions.

DRIBE2 is the fourth major steel decarbonisation project receiving state support as part of the EU’s IPCEI Hydrogen initiative. Salzgitter, thyssenkrupp Steel Europe, and the companies of Stahl-Holding-Saar already received funding in 2023.